The government repeatedly claims economic revival, but the actual situation tells a different story as millions of Pakistanis are dealing with substandard health facilities, education, drinking water and living conditions.

As much as the emphasis of the government is on economic stabilisation, foreign exchange reserve and fiscal targets, it becomes important to consider the latest findings by the United Nations Development Programme (UNDP). As per the latest estimates, 38.3 percent of the Pakistani population faces multidimensional poverty, whereas 12.9 percent are vulnerable to being in multidimensional poverty. The numbers themselves present an indication about the extent of deprivation the country is facing.

Multidimensional poverty is a more comprehensive indicator of deprivation when compared with income poverty. In fact, multidimensional poverty measures the degree to which a person has access to necessities such as nutrition, health care, education, sanitation, electricity, water supply and adequate housing facilities. A person or a household could earn enough to not fall in the category of income poverty but face severe lack of other necessities.

This situation is further worsened with regards to other neighboring nations. The reported incidence of multidimensional poverty in the two adjacent nations of India and Bangladesh is 16.4% and 14.9% respectively. It should be noted that while the surveys used for these figures are not conducted in the same year and thus do not constitute a perfect snapshot, there still exists a noticeable discrepancy which highlights the difficulties that Pakistan faces with regards to providing even basic facilities, better human development and making sure economic growth trickles down to the underprivileged groups.

The depth of deprivation experienced by those who fall within the category of multidimensionally poor in Pakistan is 51.7%. This implies that people labeled poor experience more than half of the weightages of the deprivations identified by the index. The other 12.9% of people labeled as being vulnerable to poverty are at a risk of falling into poverty in case of any illness, job loss, rising cost of food, natural calamity or any other economic shock.

These results highlight the weaknesses inherent in assessing the economic performance of a country in terms of financial metrics alone. Higher foreign exchange reserves, reduction in fiscal deficits, lower levels of inflation, or even moving closer to external finance objectives will all result in stabilisation. But these have very little significance for people who do not have enough money to feed themselves adequately, to send their children to school, or to get themselves treated at hospitals. Stabilization is a necessary prerequisite for development, but it cannot be an alternative to improving standards of life and providing economic opportunities.

The experience of Pakistan shows that the gains of macroeconomic adjustment do not always address the requirements of the common people. Higher prices for utilities, taxes, and consumer goods have put great strain on household income. Businesses that have higher costs for energy and capital find it difficult to increase output and generate employment. With weak economic activity, poor households do not get many opportunities to better their situations, while those that are vulnerable may be pushed deeper into poverty.

There is far more to be expected than just an immediate financial crisis. Multidimensional poverty can trap generations in its vicious circle and ruin the country’s economic future. Malnourished children can have delayed physical and cognitive development that will affect their ability to work and learn later in life. The same applies to people who drop out of school before they graduate; they tend to work poorly paid jobs.

Moreover, inadequate medical care lowers productivity of workers and increases the likelihood of having to pay for preventable illnesses. Inadequate sanitation, lack of clean water and poor-quality homes add up to health risks and affect mostly children and the most vulnerable population members. All these problems reinforce each other making it almost impossible to break free from the cycle of poverty even if the income situation temporarily improves.

In light of this, it is necessary for the government to think again about its expenditure strategy. It will always be necessary to have some fiscal discipline, especially in times when debt-servicing and other mandatory payments eat away a significant portion of the budget. However, care needs to be taken in making budget cuts and other revenue decisions, as these decisions should not undermine the need to invest in human development. Investment in education, primary health care, nutrition, clean drinking water and sanitation must be viewed as a development effort rather than an expense.

Efficiency in public expenditure will also be crucial. The federal and provincial governments will have to deal with the inefficiency in service delivery, lack of accountability, poor coordination, and misallocation of scarce resources. Projects should be evaluated for their developmental impact rather than their political visibility.

Policies aimed at poverty alleviation should be incorporated as an important and measurable goal of economic policy-making. Policymakers ought to set concrete targets for the alleviation of poverty, conduct evaluations of progress made, and identify areas with critical needs of vital social services. With proper local statistics, policymakers will have the ability to allocate scarce resources in regions that are disadvantaged compared to others in the country based on averages.

Social security policies should be designed in a way that complements the provision of better social services and opportunities for productive employment. Assistance in the form of cash transfers can enable poor families to cope with inflation and shocks to income; however, alleviating poverty in the long run calls for providing the population with quality education, healthcare, skills and job opportunities. The provincial governments, which are responsible for many aspects of social services delivery, must be held responsible for concrete achievements rather than the funding of various programs.

The conclusions drawn by the UNDP put Pakistan’s problem in a much broader perspective that takes into consideration the whole world community. Over 1.2 billion people suffer from multidimensional poverty, which illustrates that poverty is one of the key problems in development. Still, the relatively high rate of multidimensional poverty in Pakistan calls for an effective response at the national level, based on the country’s particularities and challenges. To wait until the benefits of stabilization trickle down to the deprived would mean to extend their suffering.

In other words, what Pakistan needs is a combination of macroeconomic stabilizations and investments in the human capital. It is not enough just to have good macroeconomic indicators – one should assess the situation on a broader scale and see if millions of people who lack access to basic necessities can benefit from the economic recovery.

Beyond the stabilization policy being an end in itself, it is imperative for the government to show how the benefits of its policies can impact the lives of the people positively. Absence of constant investment in human development and strong institutions means that the economic achievements would be weak and unsustainable. It is impossible for Pakistan to achieve sustainable economic prosperity without improving the conditions of a significant proportion of its population who are exposed to multiple forms of deprivations.